Marico reports 22.3% revenue growth in FY2015 and 0.80 pp EBITDA Margin decline from 16.2% to 15.4%

30-04-2015 • About Marico ($MARICO) • By InTwits

Marico reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Marico has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 5.7%.
• CAPEX is quite volatile: 591 in FY2015, 774 in FY2014, 9,915 in FY2013, 1,021 in FY2012, 1,841 in FY2011
• The company has highly profitable business model: ROIC is at 36.1%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Marico ($MARICO) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	31,350	39,797	45,962	46,865	57,330	22.3%
EBITDA	4,187	4,864	6,368	7,591	8,828	16.3%
Net Income	2,864	3,171	3,959	4,854	5,735	18.1%
Balance Sheet
Cash	1,343	484	497	261	2,047	684.5%
Short Term Debt	3,401	3,941	4,392	4,283	2,636	-38.5%
Long Term Debt	3,817	3,907	4,326	2,515	1,687	-32.9%
Cash flow
Capex	1,841	1,021	9,915	774	591	-23.7%
Ratios
Revenue growth	-52.7%	26.9%	15.5%	2.0%	22.3%
EBITDA growth	10.6%	16.2%	30.9%	19.2%	16.3%
EBITDA Margin	13.4%	12.2%	13.9%	16.2%	15.4%	-0.8%
Net Income Margin	9.1%	8.0%	8.6%	10.4%	10.0%	-0.4%
CAPEX, % of revenue	5.9%	2.6%	21.6%	1.7%	1.0%	-0.6%
ROIC	25.9%	23.2%	22.6%	26.9%	36.1%	9.2%
ROE	36.5%	30.8%	25.3%	29.0%	36.0%	7.0%
Net Debt/EBITDA	1.4x	1.5x	1.3x	0.9x	0.3x	-0.6x

Revenue and profitability

Marico's Revenue surged on 22.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.2 pp from 28.9% to 33.1% in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Marico had CAPEX/Revenue of 1.0%. Marico's CAPEX/Revenue decreased slightly on 1.5 pp from 2.6% in FY2012 to 1.0% in FY2015. For the last three years the average CAPEX/Revenue was 8.1%.

Return on investment

The company operates at high and attractive ROIC (36.10%) and ROE (36.00%). ROIC increased on 9.2 pp from 26.9% to 36.1% in FY2015. ROE increased on 7.0 pp from 29.0% to 36.0% in FY2015.

Leverage (Debt)

Debt level is 0.3x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 0.9x to 0.3x in FY2015. Debt dropped on 36.4% in FY2015 while cash surged on 684% in FY2015.

Management team

Saugata Gupta is a Marico's CEO. Saugata Gupta has spent 5 years at the company. The company's CFO Vivek Karve has spent 4 years at the company.

Appendix 1: Peers in Personal Products

Below you can find Marico benchmarking vs. other companies in Personal Products industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Procter & Gamble Hygiene & Health Care ($PGHH)	-65.3%	29.4%	29.9%	21.5%
Godrej Consumer Products ($GODREJCP)		32.0%	31.7%	18.6%	8.7%
Dabur India ($DABUR)	-56.2%	29.3%	16.3%	15.0%
Colgate-Palmolive (India) ($COLPAL)	-55.8%	17.8%	17.5%	13.1%
Hindustan Unilever ($HINDUNILVR)	-60.1%	17.0%	14.5%	8.4%
Median (7 companies)	-56.2%	23.5%	17.5%	13.1%	8.7%
Marico ($MARICO)		26.9%	15.5%	2.0%	22.3%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Emami ($EMAMILTD)	21.8%	20.9%	20.5%	24.3%
Bliss Gvs Pharma ($BLISSGVS)		27.2%	28.1%	20.9%
Procter & Gamble Hygiene & Health Care ($PGHH)	16.6%	16.3%	15.4%	20.7%
Colgate-Palmolive (India) ($COLPAL)	22.6%	21.7%	21.0%	18.6%
Hindustan Unilever ($HINDUNILVR)	14.0%	15.2%	16.0%	16.6%
Median (7 companies)	18.2%	18.1%	16.0%	18.6%	16.6%
Marico ($MARICO)	13.4%	12.2%	13.9%	16.2%	15.4%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Bliss Gvs Pharma ($BLISSGVS)		8.7%	5.0%	16.7%
Colgate-Palmolive (India) ($COLPAL)	1.8%	3.8%	4.9%	9.0%
Procter & Gamble Hygiene & Health Care ($PGHH)	5.5%	4.2%	2.2%	7.2%
Emami ($EMAMILTD)	4.0%	8.0%	5.0%	3.6%
Dabur India ($DABUR)	22.7%	4.4%	3.9%	3.0%
Median (7 companies)	4.7%	4.2%	4.1%	3.6%	2.6%
Marico ($MARICO)	5.9%	2.6%	21.6%	1.7%	1.0%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Hindustan Unilever ($HINDUNILVR)	96.0%	99.9%	114.4%	133.0%
Colgate-Palmolive (India) ($COLPAL)	134.8%	121.4%	120.4%	104.4%
Emami ($EMAMILTD)	28.2%	31.5%	36.7%	43.3%
Procter & Gamble Hygiene & Health Care ($PGHH)	25.2%	28.1%	30.3%	43.2%
Dabur India ($DABUR)	36.5%	29.4%	28.7%	30.8%
Median (9 companies)	26.9%	28.7%	30.3%	30.8%	18.8%
Marico ($MARICO)	25.9%	23.2%	22.6%	26.9%	36.1%

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Bliss Gvs Pharma ($BLISSGVS)		0.0x	1.1x	1.9x
Godrej Consumer Products ($GODREJCP)	2.7x	1.6x	1.7x	1.5x	1.7x
Cupid ($CUPID)	2.2x	1.7x	0.5x	1.4x
Dabur India ($DABUR)	1.0x	0.8x	1.2x	0.3x
Hindustan Unilever ($HINDUNILVR)	-0.6x	-0.3x	-0.1x	-0.2x
Median (8 companies)	0.6x	0.5x	0.2x	0.1x	1.7x
Marico ($MARICO)	1.4x	1.5x	1.3x	0.9x	0.3x

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